US consumer spending for the first half of 2010 in the home entertainment window for pre-recorded entertainment – DVD, Blu-ray Disc and digital distribution – reached $8.8 billion, down 3.3% compared to the same period last year. But it was down by only 0.7% in the second quarter compared to the same period in 2009.

Digital distribution maintained its steady rise with electronic sell-through (EST) up 36.9% to $285 million and video-on-demand (VOD) up 19.1% to $865 million in the first half of the year, a combined growth of 23.1% to $1.1 billion. This is the first time that digital distribution surpassed the $1 billion mark in the first six months of the year.

Blu-ray Disc continued its strong performance, with sell-through and rental reaching a combined total of $982 million for the first half of the year. Blu-ray Disc sell-through was up 84% to $733 million at the mid-year point, compared to the same period last year. Blu-ray Disc sell-through has a sharper growth rate of 112% in the second quarter, to $363 million, compared to second quarter 2009.

Blu-ray Discs shipped to retail in the first half of 2010 topped 77 million, up 98% over the comparable period in 2009, according to figures compiled by Swicker & Associates on behalf of the DEG.

Blu-ray hardware sales continued to climb in the first half of the year, selling almost two million machines, an increase of 103% over the same period last year. This brings the total installed base of Blu-ray Disc playback devices – BD players, PC drives and PS3 – in the US to 19.4 million units.

Taken together, packaged media sell-through (DVD and Blu-ray Disc) declined 7.1% in the first half of the year compared to the same period last year. In the second quarter, though, packaged media sell-through declined only 3% compared to second quarter 2009.

According to Rentrak Corporation’s Home Video Essentials, rental spending was down 4.9% to just under $3 billion in the first half of 2010. The overall market continues to be hindered by the Movie Gallery store closures. However, kiosk revenue was up 55% in the first half of the year.

The death of DVD harware is prematured. According to figures compiled by the DEG based on data from CEA, retailers and manufacturers, 8.7 million DVD players sold to US consumers in the first half of 2010.

Since launch in spring 1997, some 284 million DVD players, including set-top and portable DVD players, Home-Theater-in-a-Box systems, TV/DVD and DVD/VCR combination players, have sold to consumers, bringing the number of DVD households to approximately 91 million (adjusting for households with more than one player). The DEG estimates that some 68 percent of DVD owners have more than one player.

Some 79 million HDTVs have be sold to consumers so far. With some 8.5 million HDTVs selling in the first half of the year, US household penetration is at approximately 51.32 million.

Story filed 22.07.10